The Biotech Beat: 9.30-10.6.24

by Joey Bose and Aruesha Srivastava

??Upshot

In the ever-evolving landscape of biotech, 2024 has proven to be a year of breakthroughs, deals, and shifting strategies. From Eli Lilly's $3.1 billion Q2 triumph with Mounjaro for diabetes, now free of its two-year supply shortages ??, to Roche’s $850 million bet on next-gen CDK inhibitors ??, the competition is fierce. Gilead responded to pricing criticism by licensing generic versions of lenacapavir to 120 low-income countries ??, while CAMP4 inked a collaboration with BioMarin for RNA-targeting ASOs amidst IPO preparations ??. Trump’s sudden pivot away from his aggressive Medicare drug pricing plan caught the pharma world off guard, signaling a shift towards transparency and competition ??. Meanwhile, companies like Septerna are driving innovation in GPCR-targeting drugs for hypoparathyroidism as they prepare for a Nasdaq debut ??. Even as Trump pulls back, Sanofi offloaded its rare disease drug Enjaymo to Recordati for $825 million ??, focusing instead on immunology. This year is poised to reshape the biotech sector, with exciting drugs advancing and IPOs reigniting hope for innovation despite regulatory and financial hurdles ??.

?? Research, Development & Drug Approvals ??

?? Carvykti’s Game-Changer: CAR-T Cell Therapy Sets New Standard in Multiple Myeloma Survival

The Facts

Johnson & Johnson and Legend Biotech’s CAR-T cell therapy, Carvykti, reduced the risk of death by 45% compared to standard of care for multiple myeloma patients, with 76.4% of patients alive at 34 months, compared to 63.8% on standard treatment (p=0.0009). These results mark a historic milestone in cell therapy, showing for the first time that CAR-T can significantly extend life for this type of blood cancer. The FDA approved Carvykti for earlier use in April, based on the CARTITUDE-4 study, which showed the therapy's superior efficacy.

Our Opinion

Carvykti’s success is monumental for the biotech industry, as it signals a shift in how multiple myeloma is treated and offers hope to patients with limited options. However, concerns around higher early mortality rates and the complex manufacturing process for CAR-T therapies remain hurdles. These impressive survival benefits could fuel broader adoption, but pricing and scalability challenges may temper its immediate impact. The commercial potential is huge, but success will depend on overcoming the practical limitations of CAR-T technology.

Your Turn

With Carvykti demonstrating such significant survival benefits, how should healthcare systems balance the high costs and logistical challenges of CAR-T therapies against their potential to redefine cancer treatment, especially as more cell therapies reach the market?

??? Dupixent’s FDA Win Expands Its Blockbuster Reach to COPD Market

The Facts

Sanofi and Regeneron’s Dupixent has secured FDA approval as the first biologic therapy for chronic obstructive pulmonary disease (COPD), a condition prevalent in smokers. The approval, based on two Phase 3 studies showing a significant reduction in COPD exacerbations, positions Dupixent as an add-on treatment for patients not adequately controlled by current therapies. This marks the drug’s sixth indication, following its success in asthma, eczema, and other disorders. Dupixent generated $11.6 billion in 2023, with sales up nearly 30% from the prior year.

Our Opinion

Dupixent’s FDA approval for COPD is a pivotal moment in respiratory medicine, as it challenges the dominance of older inhaled therapies with a more targeted biologic approach. However, the high cost of biologics like Dupixent could hinder widespread adoption, especially when alternatives such as Verona Pharma's Ohtuvayre and GSK’s Nucala are emerging. While Dupixent’s efficacy in reducing exacerbations is clear, the economic burden on healthcare systems and patients raises important questions about long-term sustainability.

Your Turn

With Dupixent now leading the charge as the first biologic for COPD, how should healthcare systems weigh the benefits of biologic therapies like Dupixent against the availability of newer, potentially cheaper alternatives, particularly in cost-conscious regions?

?? AI Meets Aging: Integrated Biosciences Pioneers Drug Discovery with Cutting-Edge Tech

The Facts

Felix Wong, a rising star in synthetic biology, leads Integrated Biosciences, a startup that has raised $17 million in seed funding to apply AI models in discovering drugs for age-related diseases. Partnering with Princeton’s Max Wilson, the five-person team is using optogenetics to simulate cellular stress and screen 500,000 small molecules, with two lead programs targeting antiviral activity and the elimination of senescent cells. This approach builds on Wong’s previous antibiotic research and leverages next-gen tech to target complex biological processes linked to aging.

Our Opinion

Integrated Biosciences exemplifies the growing intersection of AI and biotech, but the lofty ambitions of this young company also raise concerns about scalability and execution in such an unproven field. While the use of optogenetics to simulate cell stress is an exciting innovation, the jump from research to commercially viable drugs remains a formidable challenge. The market’s appetite for AI-driven drug discovery is high, but success will depend on how well Integrated can transition from early discovery to clinical results.

Your Turn

With AI-driven drug discovery gaining momentum, how should investors evaluate the risks of backing companies like Integrated Biosciences, especially when compared to more established approaches in the competitive aging and longevity biotech sector?

?? BioNTech’s Bold AI Gamble: Will InstaDeep Redefine Cancer Treatment?

The Facts

BioNTech, known for its Covid-19 vaccine, is diving deeper into artificial intelligence by unveiling new AI tools to design antibodies and analyze tumor tissues. At its first AI summit, BioNTech highlighted its AI-driven cancer vaccine programs and InstaDeep’s new Bayesian Flow Network (BFN) for protein design. While BioNTech has clinical programs incorporating AI, including personalized mRNA vaccines, its strategic use of InstaDeep’s technology remains undisclosed. InstaDeep’s AI models have already outperformed BioNTech’s decade-long internal efforts, signaling a bold shift in how biotech innovation is driven.

Our Opinion

BioNTech’s move to marry AI with its therapeutic platforms represents a leap forward in drug discovery, but it also raises questions about the practicality and scalability of such high-tech endeavors. While AI’s potential to accelerate discovery is clear, BioNTech must navigate competition from well-funded startups and balance open-source collaboration with its commercial ambitions. The lack of transparency around how InstaDeep’s AI models will impact current drug programs may leave some skeptical about the long-term execution of this strategy.

Your Turn

With AI-driven drug discovery becoming a focal point for companies like BioNTech, how can smaller biotechs leverage similar technologies without the deep financial resources or infrastructure of industry giants?

?? Opdivo's Expanded Approval Shakes Up Lung Cancer Surgery Standards

The Facts

The FDA has approved Bristol Myers Squibb’s Opdivo for use before and after surgery in non-small cell lung cancer (NSCLC) patients, marking a significant label expansion. This regimen, combining Opdivo with chemotherapy pre-surgery and Opdivo alone post-surgery, reduced the risk of cancer recurrence and complications by 42%, according to the CheckMate -77T study. Opdivo now stands alongside Merck’s Keytruda and AstraZeneca’s Imfinzi as a leading checkpoint inhibitor in perioperative lung cancer treatment, just ahead of the FDA’s October 8 decision deadline.

Our Opinion

Opdivo’s approval solidifies its role in lung cancer surgery, but the growing trend of perioperative immunotherapies also raises concerns about potential overtreatment. While the data on reduced recurrence and progression is promising, the FDA has voiced reservations about whether pre- and post-surgical regimens may offer redundant benefits. The rush to incorporate these checkpoint inhibitors reflects a competitive landscape, but careful consideration of cost, patient burden, and long-term outcomes will be crucial in shaping the future of perioperative cancer care.

Your Turn

With multiple checkpoint inhibitors now approved for perioperative lung cancer treatment, how should clinicians balance the benefits of these therapies with concerns about overtreatment and the financial burden on patients and healthcare systems?

?? Investment, M&A, and IPOs ??

?? Roche’s $850M Bet on Regor: A Bold Play for Next-Gen CDK Inhibitors in Breast Cancer

The Facts

Roche has struck an $850 million deal to acquire Regor Pharmaceuticals' portfolio of CDK inhibitors, including RGT-419B, which showed a 28.6% partial response rate in Phase 1 trials for breast cancer. Regor's other preclinical candidate, RGT-587, targets brain metastases. Roche, already a major player in breast cancer with drugs like Perjeta and Kadcyla, plans to advance these CDK inhibitors and explore combinations with its existing therapies. This acquisition aligns with Roche's broader strategy to prioritize oncology as a key driver of growth.

Our Opinion

Roche’s acquisition of Regor is a strong strategic move, but questions remain about the long-term potential of CDK inhibitors, especially given the competitive landscape in breast cancer treatments. While early results for RGT-419B are promising, the challenge will be in differentiating it from existing therapies and ensuring it addresses resistance mechanisms effectively. Roche’s confidence in Regor’s pipeline is clear, but the market's growing skepticism around expensive oncology acquisitions means Roche will need to deliver compelling clinical outcomes to justify the investment.

Your Turn

With Roche doubling down on CDK inhibitors and breast cancer treatments, how should the company balance its oncology focus with emerging competition in other high-burden diseases, such as cardiovascular and metabolic conditions, which are expected to dominate healthcare needs by 2035?

?? DCVC Bio Raises $400M to Double Down on Deep Tech Life Sciences

The Facts

DCVC Bio has raised $400 million for its third biotech fund, following a $350 million effort four years ago. The venture capital firm, founded in 2018, backs companies working on cutting-edge technologies like CNS gene therapy, cell therapy, and AI-driven drug development. This raise comes amid a surge in biopharma VC activity, with similar funds launched by ARCH and Curie.Bio . DCVC Bio’s investments span across genetic medicines, radiopharmaceuticals, and even agricultural tech, with a focus on ambitious, high-risk projects.

Our Opinion

DCVC Bio’s success in securing $400 million signals strong investor confidence in deep tech life sciences, but the crowded field of biopharma VCs raises the stakes for finding truly transformative breakthroughs. While the firm's “swing-for-the-fences” approach aligns with high-impact innovation, the market’s volatility and the inherent risks in early-stage biotech make this strategy both exciting and precarious. The challenge will be in distinguishing itself amid the current flood of capital and managing the balance between high-risk investments and tangible returns.

Your Turn

With so many biotech venture funds raising capital, how should firms like DCVC Bio differentiate themselves in an increasingly crowded space, particularly when competing for transformative but risky deep tech life sciences investments?

?? CAMP4’s IPO Push: Betting Big on RNA Tech with BioMarin Partnership

The Facts

CAMP4 Therapeutics has struck a deal with BioMarin to develop RNA-targeting antisense oligonucleotides (ASOs), securing $1 million upfront and up to $370 million in potential future payments. This collaboration comes as the startup prepares for its upcoming IPO, following previous partnerships with Alnylam and Biogen. CAMP4 is advancing its Phase 1 drug CMP-CPS-001 for urea cycle disorders, with initial data expected next year. The deal highlights BioMarin’s cautious bet on RNA technology amid recent pipeline cuts and leadership changes.

Our Opinion

CAMP4 Therapeutics has struck a deal with BioMarin to develop RNA-targeting antisense oligonucleotides (ASOs), securing $1 million upfront and up to $370 million in potential future payments. This collaboration comes as the startup prepares for its upcoming IPO, following previous partnerships with Alnylam and Biogen. CAMP4 is advancing its Phase 1 drug CMP-CPS-001 for urea cycle disorders, with initial data expected next year. The deal highlights BioMarin’s cautious bet on RNA technology amid recent pipeline cuts and leadership changes.

Your Turn

With CAMP4’s focus on RNA-targeting therapies, how should investors evaluate the long-term potential of antisense oligonucleotides, especially in light of BioMarin’s recent pipeline reductions and the competitive landscape of RNA-based drug development?

?? Kailera’s $400M Power Move: Racing to Redefine Obesity Treatment with Next-Gen Drugs

The Facts

Kailera Therapeutics has secured $400 million from top investors like Bain Capital and Atlas Venture to bring next-generation obesity drugs to market. The company has exclusive rights to four experimental therapies from Jiangsu Hengrui Pharmaceuticals, including its lead drug KAI-9531, a GLP-1/GIP dual agonist already in Phase 2 in China. Kailera plans to jump directly into global Phase 3 trials, aiming to challenge heavyweights like Novo Nordisk and Eli Lilly, both of whom dominate the obesity market with GLP-1-based treatments.

Our Opinion

Kailera’s rapid leap into Phase 3 for its obesity treatment is ambitious but faces formidable competition in a market already crowded with established players. While the company’s GLP-1/GIP dual agonist has potential, catching up to the entrenched franchises of Novo Nordisk’s Wegovy and Eli Lilly’s Zepbound will be no small feat. The $400 million funding is impressive, but with high development costs and the intense race to secure regulatory approvals, Kailera’s future success hinges on speed, differentiation, and the ability to scale manufacturing.

Your Turn

With Kailera and other emerging companies racing to develop next-gen obesity drugs, how can new entrants effectively differentiate themselves from industry giants like Novo Nordisk and Eli Lilly, especially in terms of clinical efficacy, cost, and market access strategies?

?? Biotech's Financial Revival: Rate Cuts and IPOs Fuel a Promising Rebound

The Facts

After a sluggish period, biotech is experiencing a financial resurgence, with private financings in 2024 expected to surpass 2023 levels. The third quarter saw $33.9 billion raised through 189 secondary offerings, marking a 34% increase from last year. A mini IPO revival and strong venture capital fundraising from Bain Capital, ARCH, and Flagship Pioneering signal renewed investor confidence. However, M&A activity remained weak, with Eli Lilly's $3.2 billion buyout of Morphic being the only significant deal, while European pharma stocks faced dips in share prices.

Our Opinion

The uptick in biotech financing signals a return to optimism, but the sector still faces challenges, particularly in the weak M&A landscape and performance variability in European pharma stocks. With several key IPOs on the horizon and continued private mega-rounds, the industry seems poised for growth. However, the pressure is on for companies to deliver strong clinical data, as the excitement around innovations like GLP-1 therapies will increasingly be driven by real-world results. The question remains whether these financial trends can sustain long-term growth amidst evolving market conditions.

Your Turn

As the biotech industry rebounds financially, how should investors balance optimism about IPO and financing revivals with concerns about weak M&A activity and volatility in European pharma stocks, especially in the context of upcoming elections and further economic shifts?

?? Septerna Eyes IPO: Betting Big on GPCR Innovation and Hypoparathyroidism Treatment

The Facts

Septerna has filed for its IPO, planning to trade as $SEPN on the Nasdaq, joining startups like Upstream Bio and CAMP4 Therapeutics. The Bay Area biotech is developing drugs targeting G protein-coupled receptors (GPCRs), including its lead oral small molecule SEP-786 for hypoparathyroidism, which entered Phase 1 trials last month. Septerna has raised over $100 million and previously sold a GPCR program to Vertex for $47.5 million. The company believes its allosteric modulators can unlock new opportunities in a popular but underexplored drug target class.

Our Opinion

Septerna’s IPO ambitions signal renewed confidence in biotech markets, yet it faces significant competition in the hypoparathyroidism space, with companies like AstraZeneca and Ascendis Pharma already advancing injectable treatments. While Septerna’s push for an oral solution could be a game-changer, the success of its approach remains unproven in clinical settings. With recent IPO momentum in biotech, Septerna's unique focus on GPCR innovation could set it apart, but it must deliver compelling data to justify its market valuation and attract investors.

Your Turn

With Septerna entering an already crowded hypoparathyroidism space, how should it position its oral small molecule approach against established injectable treatments, and what role will investor confidence in GPCR-targeting therapies play in its IPO success?

?? Sanofi Sheds Enjaymo in $825M Deal as It Refocuses on Immunology

The Facts

Sanofi is offloading its rare autoimmune disease drug Enjaymo to Recordati for $825 million upfront, with potential future payments of $250 million. Enjaymo, approved in 2022 for hemolysis in adults with cold agglutinin disease (CAD), saw €55 million in sales in the first half of 2024. Recordati expects annual peak sales of up to €330 million, positioning the monoclonal antibody as a key asset in its rare disease portfolio. The move aligns with Sanofi’s shift away from rare diseases toward immunology and inflammation, as it continues to refine its strategic focus.

Our Opinion

Sanofi’s divestiture of Enjaymo underscores its broader pivot toward high-growth areas like immunology, but raises questions about how smaller players like Recordati will handle the commercialization of niche therapies in rare diseases. While Enjaymo’s strong clinical profile gives Recordati a foothold in CAD treatment, the fragmented market and the cessation of competitor trials suggest limited growth potential. This deal reflects the challenges and opportunities of navigating the rare disease space, where high unmet needs must be balanced against the financial realities of limited patient populations.

Your Turn

With Sanofi shifting its focus to immunology and divesting rare disease assets like Enjaymo, how should smaller pharmaceutical companies like Recordati capitalize on the rare disease market, and what strategies will be most effective in maximizing the commercial potential of niche therapies?

?? Politics & Policy ???

?? California’s PBM Reform Veto: Newsom Faces Backlash for Blocking Transparency Bill

The Facts

California Governor Gavin Newsom vetoed a bipartisan bill that sought to reform pharmacy benefit managers (PBMs) by requiring state licenses and transparency in drug pricing, sparking criticism from state Sen. Scott Wiener and healthcare advocates. The bill, which garnered strong bipartisan support, aimed to prevent health insurers from charging more than what they paid for drugs. Newsom defended his decision, arguing that more granular data is needed to understand the role PBMs play in driving prescription drug costs before implementing such measures.

Our Opinion

Newsom’s veto of PBM reform has drawn sharp criticism, particularly as it undermines efforts like the state’s CalRx plan to produce affordable insulin. While Newsom’s call for further data collection reflects a cautious approach, critics argue that delaying action will only perpetuate the opaque and often exploitative practices of PBMs. This veto reflects a broader tension in healthcare reform, where competing interests—between transparency, affordability, and corporate power—continue to shape policy decisions. The pressure is now on California’s legislature to regroup and push forward meaningful changes.

Your Turn

With the growing scrutiny of PBM practices both at the state and federal levels, what strategies should policymakers pursue to balance the need for transparency and regulation with concerns over unintended consequences in the prescription drug supply chain?

?? Gilead’s Lenacapavir Deal: Will Licensing Solve the HIV Access Dilemma?

The Facts

Gilead Sciences has struck voluntary licensing agreements for generic versions of its twice-yearly HIV medicine, lenacapavir, across 120 low- and middle-income countries. The move comes after lenacapavir demonstrated near-total efficacy in preventing HIV in late-stage trials, but its $42,250 price tag sparked criticism. Gilead’s licensing efforts aim to address concerns over access and affordability, though critics argue that the exclusion of Latin America and limited production capacity hinder the potential impact of this decision on the global HIV epidemic.

Our Opinion

Gilead’s licensing deal is a step in the right direction, but it fails to fully address the complexities of global HIV access. By retaining control over key markets and excluding entire regions like Latin America, the company risks perpetuating existing inequalities in healthcare access. While the agreement’s royalty-free nature is a positive, questions around production capacity and distribution raise doubts about whether this will lead to meaningful change. If Gilead is serious about using lenacapavir to combat the HIV epidemic, broader, more inclusive efforts will be needed.

Your Turn

With lenacapavir’s pricing and access under intense scrutiny, how should global health organizations work with pharmaceutical companies like Gilead to ensure equitable access to life-saving drugs, especially in regions like Latin America that have been excluded from current licensing agreements?

?? Eli Lilly Ends Tirzepatide Shortages, But Knockoff Battle Looms

The Facts

Eli Lilly’s GLP-1 blockbuster tirzepatide, sold as Mounjaro for type 2 diabetes and Zepbound for weight loss, is back on track after two years of supply shortages. The FDA announced that Lilly can now meet national demand, though localized disruptions may continue as the drugs reach pharmacies. Compounded versions of tirzepatide emerged during the shortage, with Lilly filing lawsuits against entities selling “untested, unapproved knockoffs.” Mounjaro generated $3.1 billion in Q2, while Zepbound made $1.2 billion. Lilly has invested $9 billion to boost production at its Indiana site.

Our Opinion

While resolving tirzepatide's supply issues is a win for Lilly, the surge of compounded versions highlights a growing problem in the pharmaceutical industry. The popularity of GLP-1 drugs like Mounjaro and Wegovy has opened the door to unregulated, potentially unsafe alternatives flooding the market. As Lilly ramps up production to meet demand, it also faces the challenge of protecting its intellectual property and consumer trust. The rise of compounded knockoffs underscores the need for tighter regulations, but Lilly must also ensure that legitimate supply reaches patients quickly to curb reliance on these alternatives.

Your Turn

With Eli Lilly combating compounded versions of tirzepatide, how should regulatory bodies address the growing trend of compounding popular, high-demand drugs to ensure patient safety while balancing supply shortages?

?? Trump Backs Off Medicare Drug Pricing Reform, Shifts Focus to Transparency and Competition

The Facts

Former President Trump is stepping away from his aggressive 2020 drug pricing policy that would have tied Medicare prices to those in developed countries, a move that could have cut billions from pharmaceutical companies' revenues. The Trump campaign has instead shifted focus to broader healthcare reforms, promising to lower drug costs through transparency, competition, and expanding affordable options. While the former president’s new stance is less specific, his rhetoric remains critical of Big Pharma and the industry’s role in rising healthcare costs.

Our Opinion

Trump’s reversal on drug pricing reflects the ongoing tug-of-war between healthcare affordability and industry interests. While his earlier proposal to slash drug prices by pegging Medicare to international standards threatened a massive disruption to pharma’s business model, his new, less defined strategy may leave many questioning whether real reform will come. The pharmaceutical industry has breathed a sigh of relief, but the debate over who bears responsibility for high drug prices continues. With election cycles looming, Trump’s evolving stance on healthcare policy signals that drug pricing will remain a contentious issue.

Your Turn

With Trump backing away from his Medicare drug pricing policy, how should future administrations balance the need for lowering drug prices while avoiding unintended consequences for innovation and investment in the pharmaceutical industry?

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Disclaimer: The contents of this article are not to be construed with investment advice. The information presented in this article is a compilation of current events, technical analyses, corporate press releases, and the author's personal viewpoints about the biotechnology industry. While efforts have been made to provide accurate and timely information, there may be inadvertent errors, omissions, or inaccuracies. Therefore, investment decisions should not be made solely based on the content of this article. The article may contain statements that are forward-looking in nature, encompassing predictions and future expectations that are subject to inherent risks and uncertainties; as such, actual outcomes may significantly deviate from those expressed or implied herein. This article serves purely as an informational and entertainment resource, and should not be construed as an endorsement to purchase or sell any financial securities. Prior to engaging in any investment activities, it is imperative that you conduct comprehensive due diligence and consult with a qualified financial advisor.